This is a R21/R33 phase-combined proposal aiming to develop a new treatment for diabetic macular edema using peptide angiogenic inhibitors. Vascular leakage is an early feature of diabetic retinopathy and can result in diabetic macular edema. Over-expression of VEGF is a major causative factor leading to vascular leakage in diabetic retinopathy. Currently, there is no satisfactory treatment for macular edema which remains a major cause of vision loss in diabetic patients. Plasminogen kringle 5 (K5) is a potent angiogenic inhibitor. Our recent studies have shown that K5 significantly decreases vascular leakage in the retina in the experimental diabetes, laser-induced choroid neovascularization and oxygen-induced retinopathy rat models. The K5- induced reduction of vascular leakage requires only less than one-tenth of the dose needed for the inhibition of neovascularization. Furthermore, our preliminary data suggest that the K5-induced reduction of vascular leakage may be through blocking hypoxia-induced VEGF over-expression in the retina, primarily in Muller cells. We hypothesize that a sustained ocular delivery of K5 may induce a long-term reduction of vascular leakage in diabetic retina and thus, may have therapeutic effect on cyctoid macular edema (CME) secondary to cataract surgery and diabetic macular edema. In the R21 phase, we propose to first reveal the mechanisms for the K5-induced down-regulation of VEGF expression and identify the receptor or binding protein on the cell surface which mediates the K.5-induced reduction of permeability. As diabetic macular edema is a chronic complication of diabetes and requires a long-term treatment, we propose to develop a KS-polymer pellet to achieve a sustained release of K5. The ocular delivery routes of the K5 pellet will be optimized and the pharmacokinetics will be studied in rats. The long-term effect of the K5 pellet on vascular leakage will be determined in a diabetic rat model. The R21 phase will achieve the following goals: 1),to reveal the mechanism and identify the receptor mediating the K5 action, 2) to develop a sustained delivery system for K5 and 3) to prove the concept that a sustained delivery of K5 can induce a prolonged reduction of vascular leakage, The R21 phase will provide essential tools and information for starting the R33 phase. In the R33 phase, we will study the pharmacokinetics of K5 in ocular tissues and optimize the delivery route in normal dogs, With the optimized delivery route, the efficacy of K5 on reduction of vascular leakage will be confirmed in a dog model of vascular leakage induced by intravitreal injection of IGF-1. The possible toxicity of K5 to the retinal vasculature and retinal structure will be examined in both rats and dogs by histochemistry. The retinal function will be examined by ERG recoding. Although this project does not reach clinical trials, the proposed studies will obtain pre-clinical data such as pharmacokinetics, delivery route, efficacy and toxicity from more than one species, which are essential and useful for starting clinical trials. These studies will contribute to the development of a new treatment for CME and for diabetic macular edema. This new treatment will use natural human peptides and will be less invasive. This new therapy, if successful, can prevent vision loss from macular edema in diabetic patients.